Burlington Stores (NYSE:BURL) shares rose after Loop Capital upgraded the stock to buy from hold. Analyst Laura Champine wrote in a note that “improved values and brands in stores” will likely result in market share gains for the company.
Champine hiked her rating on the stock from Hold to Buy and moved her price target from $220 to $225. She explained that macroeconomic softening and its impact on consumers offers a benefit to value-focused retailers like Burlington.
“BURL's value proposition for its lower-income consumers is obviously improved, and the company's new signage is calling out opening price points across categories,” she advised clients. “We think persistent inflation is tough for Burlington's customers, and the improved values and brands in stores are likely to drive market share gains for the company.”
She added that strong execution and inventory management shined through during the holiday season and appears to be continuing into 2023, per her channel checks. Champine noted that her checks indicate sales are especially strong in ladies’ apparel.
Burlington Stores last reported financials in early March, showing adjusted EPS in the range of $5.50 to $6.00 vs consensus $6.62, utilizing a fully diluted share count of approximately 65 million, as compared to Fiscal 2022 diluted EPS of $3.49 and Adjusted EPS of $4.26. This includes an expected benefit from the 53rd week of approximately $0.05 per share.
Shares of BURL rose $1.80 to $207.73, after fielding the upgrade.
